Eminent domain on June ballot

While most developers were eyeing property in suburbia in the 1980s, Moe Mohanna was staking his claim on some rundown buildings a few blocks from the state Capitol.

(EMAILWIRE.COM, March 05, 2008 ) SACRAMENTO — While most developers were eyeing property in suburbia in the 1980s, Moe Mohanna was staking his claim on some rundown buildings a few blocks from the state Capitol.

The Sacramento landlord began fixing up nine storefronts along K Street in an area frequented by vagrants. His properties are at the heart of the city's plans to revitalize its business district.

After years of failed negotiations to rehabilitate, exchange or buy Mohanna's buildings — which the city says violate health and safety codes — Sacramento's redevelopment agency recently moved to condemn and seize his property.

"We've done all of these things, and they are chasing us out of town," Mohanna said, as he showed photographs of once-dilapidated buildings that have a fresh coat of paint and new verandas. "They want to give the blocks to their favorite developers, and I'm just not one of them."

Mohanna vows to fight in court to keep his property, but he may score an early victory if Californians approve one of two competing eminent domain initiatives on the June primary ballot.
The initiatives — propositions 98 and 99 — would make it tougher for government agencies to seize a person's home.

But that's where the similarities end in what is shaping up to be a multi-million dollar campaign fight. The attempt to expand protections for property rights is part a national movement to limit governments' ability to seize land from unwilling sellers.

In California, the choice for voters in June will be whether they want to restrict the ability of government to take property for economic redevelopment projects — and if so, by how much.

Government agencies can seize property for public projects such as schools, roads, libraries and utility rights-of-way. They also can take blighted property. In all cases, government must pay property owners fair market value.

The more narrowly written Proposition 99 is sponsored by the League of California Cities. With a broad coalition of farmers and environmentalists, the group helped defeat a sweeping measure to limit the use of eminent domain on the November 2006 ballot.
The League's proposal this year would forbid government from taking homes for private development, the circumstance that prompted a Connecticut woman to go to the U.S. Supreme Court in 2004 to defend her home.

In that case, Kelo vs. City of New London, the Supreme Court ruled that a Connecticut redevelopment authority could take private property for hotels, shopping centers and other private developments.

It significantly expanded the traditional interpretation of eminent domain, which courts had previously limited to "public use" projects.
Proposition 99 would slightly modify existing eminent domain law in California. Only homeowners who have been in their home for at least a year consistently would be safe from government redevelopment projects.

"It's focused on the problem that came up in Kelo," said Chris McKenzie, executive director of the League of California Cities. "It doesn't go any further. We would continue to be able to use eminent domain for everything but single-family property."
Most government property acquisitions are negotiated deals, and governments in California seldom uses eminent domain to seize single-family homes, according to the state's nonpartisan Legislative Analyst's Office.

Yet it's under that expanded definition allowed by the U.S. Supreme Court decision that the Sacramento Housing and Redevelopment Agency is condemning Mohanna's properties.

"These two blocks of K Street are two of the most blighted blocks in our business district. They are bookended by successful developments," said Leslie Fritzsche, the agency's downtown manager.

"This is our main street, and it's a street we should be proud of."
Proposition 98, the initiative favored by Mohanna, would forbid redevelopment agencies and other government entities in California from evicting home owners, similar to the competing ballot initiative.

But it also has a far wider reach: Under Proposition 98, governments could not seize the properties of business owners, farmers and churches for any private redevelopment project or for the owner's water rights and other natural resources.

"It protects all property," said Jon Coupal, an attorney and president of the Howard Jarvis Taxpayers Association, which wrote the initiative. "You can still have redevelopment. What you don't do is negotiate by holding a gun."

In addition to keeping owners on their property, the measure contains two provisions that critics say go far beyond eminent domain reform.

They would phase out rent control at apartments and mobile home parks and free developers from local affordable-housing requirements when they build new subdivisions.

The League of California Cities coalition has filed a lawsuit in Sacramento County Superior Court asking a judge to include the rent control provision in the official title of Proposition 98.
"I don't think it's really very fair. It's not what it purports to be," said Vikram Amar, a law professor at the University of California-Davis. "If we're going to get rid of rent control, we need to have an open and honest discussion. To do it in one fell swoop statewide is probably not great public policy."

In Modesto, Ray Newman, 72, is circulating a newsletter warning his fellow residents at Coralwood Mobile Home Community and other parks in Stanislaus County that Proposition 98 would overturn the city's new rent control ordinance.

Frustrated with rising rents, Newman last year worked with the Modesto City Council to limit how much mobile home parks could increase rents each year.

Of the city's nine mobile home parks, only Coralwood is subject to the ordinance because its owner, Equity LifeStyle Properties, refused to negotiate rent agreements with the city. A month after Modesto approved its rent control ordinance, the company contributed $50,000 to Proposition 98, which would allow them to increase rents once a property is vacated.

"They are trying to slip one over on us," said Newman, a retired salesman and first sergeant in the Army Reserves. "If this passes, it will be a disaster for the low-income and disabled."
Equity LifeStyle Properties Inc, based in Chicago, did not return a call from The Associated Press seeking comment.
More than half of Proposition 98's $2 million in contributions have come from landlords. About $125,000 has come from out-of-state donors.

The California Farm Bureau has given $200,000, saying the initiative would ensure that farmers can keep their land and water rights.

But the farm bureau dismisses those concerns and says farmers' larger fear is that government could seize their water allotments.
"If we do not get more water development in the state, people will look to agriculture and take us out of production for our water," said Paul Wenger, an almond and walnut grower who is vice president of the California Farm Bureau. "Proposition 98 will protect the natural resources that a farm has."

Environmental groups have given to Proposition 99, saying the competing initiative would hamper governments' ability to buy open space for parks and other environmental initiatives.

For example, regulations by the California Coastal Commission that forbid homeowners or developers from building along the coast could be overturned if Proposition 98 were adopted, said Tom Adams, board chairman of the California League of Conservation Voters.

"A lot of people feel that it would prevent government from using eminent domain to protect historical buildings, cultural sites, open space or land that would need to be acquired to protect endangered species," he said.